Economic Trends Survey Shows Drop in Confidence and Increased Dissatisfaction with Government Economic Policy

29th September 2010

Discussing the results, Cork Chamber Chief Executive Conor Healy said, “Although 70% of business people in Cork say they are still confident about the future of their business, worryingly it is down 5% from the second quarter of 2010. The survey also reveals a marked deterioration in confidence in the Government’s handling of the economy. 70% of Cork’s business community say they are no longer confident in the Government’s management of the banking crisis (up from 57% in the second quarter). In addition, over half of respondents (52% up from 38.51%) say they are not confident in the Government’s budgetary policy. 79% of respondents are not confident in the Government’s handling of the issue of public sector pay”.

“Public sector reform is identified as the issue respondents wished to see the Government tackle first, with the numbers saying the Government must make this its number one priority increasing 8% to 35.83%. Public sector reform has consistently been identified by Chamber members as the number one issue the Government must address, but in the survey 83% said they were not confident in the Government’s handling of the issue. This was reflected in many individual comments received from respondents who argued that while the private sector has reduced costs, the public sector has yet to do so in the manner required” Mr Healy stated.

Mr Healy described the results as, “A wake up call to policy makers in the run up to national and local authority budgets in December” adding “The results of the survey confirm that the Government and local authorities must take action to increase confidence and ensure recovery. This will require advancing public sector reform and ensuring value for money for commercial rates amongst other measures”.

Mr Healy continued, “When asked what the budget must focus on, respondents identified two clear priorities: Investment in Economic Stimuli (prioritised by 39.5% of respondents) and Expenditure Reductions (37.82%). Less than 2% felt further increases in taxation could be considered”.

According to Mr Healy, “In relation to local government, the survey presents a stark message. Just 4% of respondents feel they get value for money from the commercial rates they pay and 40% of businesses say rates are jeopardising their commercial viability. While the numbers agreeing with domestic water charging have increased 4% to 55%, the survey suggests that the Government has to do more to convince business people of the merits of a property tax and opposition to an annual property tax now stands at 57%, up slightly from the second quarter. The Government cannot take the support of Cork’s business community on these measures to fund local government for granted and enterprise needs to be confident that the revenue will be collected efficiently and put to the best use locally”.

“The survey, completed by over 120 business owners and managers across a range of sectors, sees a slight rise in the number of businesses expecting to reduce employee numbers in the coming months (up from 15.19% to 18.52%), and a majority (61.67%) saying they do not expect to increase staff numbers in the coming 12 months. Comments from those who feel they may be in a position to recruit staff in the coming months say that uncertainty about the next budget means they are delaying recruitment. 45% of businesses now say that they are curtailed by credit restrictions compared to six months ago which shows no improvement. The exit of Bank of Scotland (Ireland) and difficulties with potential customers being unable to access finance were also highlighted” he concluded.

Return to the News section